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February 19, 2009

P.G. official: Soccer stadium won't bring revenue, build it anyway

D.C. United's plan for a $180 million-or-so stadium in Prince George's County, Maryland, is panned today by Washington Post columnist Marc Fisher, who calls it "a sweet deal for United, a feel-good boost for the beleaguered county and a financial loser for Maryland taxpayers."

Fisher's source? That'd be none other than Prince George's County Executive Jack Johnson, who defended the deal by saying, "I don't think it's going to create a lot of revenue." The reason taxpayers should put up three-quarters of the cost of a soccer stadium, he told radio station WAMU, is "public interest" and "public benefit."

Fisher then notes that a feasibility study conducted by the Maryland Stadium Authority is hardly clear about the public's interest or benefit:

Most current United fans (57% of whom live in Virginia) say they would go to fewer games at a Maryland stadium.

"New soccer stadiums in the Denver and Toronto areas were sold as possible concert venues, but each attracted only one show in its first year."

Because MLS teams play only 16 home games in a season, "even if international soccer matches, a women's soccer team and a pro lacrosse team also used the stadium, it would be dark about 300 days a year."

Since D.C. United has to know these same figures - especially the one about their current fans not wanting to make the trek to Maryland - this has to increase the odds that the Prince George's plan is mostly a stalking horse to kick-start plans for a soccer stadium in D.C. If so, it's not working: Washington Mayor Adrian Fenty issued a statement on Tuesday declaring, "While the District will greatly miss being home to the team, the administration congratulates both D.C. United and Prince George’s County on their successful negotiations." Fenty diplomatically failed to add: "Suckers!"

1. It's about time someone in the mainstream media wrote something negative about a new publicly-funded stadium, even if the author didn't have to much fact checking and got most of the 'negative' info from one politician.

2. Soccer-bashing is en vogue in this country, even in soccer-friendly DC, so the tone of this article comes as no surprise to me.

3. Last I checked, the average NFL stadium is used only about a dozen or so times per year, so why doesn't anyone ever write about that? Or do the meetings and conventions that can be held in new stadia at the expense of other venues in the same city count as positive reasons to provide public funds for new stadia and contribute to the demise of existing buildings?

Posted by Chris A. on February 19, 2009 11:54 AM

NFL stadiums are used 12 times a year for NFL, maybe 3 or 4 concerts a year if lucky, and those stadiums hardley ever have acommunity events or programs that take place there. I don't beleive at all that 57% of fans would not go to games if the stadium was in Maryland.

Though I agree that Metro access is VERY important.

Posted by nyrmetros on February 19, 2009 04:44 PM

P.G. county residents should have a stadium if they want it but they should realize that it will generally take money away from other things in the county. Plus what the heck kind of 24K seat stadium will DCU be building for $195 million? Victor MacFarlane and Kevin Payne will be sending their children to Harvard with money earned from taxes paid by a mother whose son died in the streets of Forestville.

Posted by NEDCSoccerFan on February 19, 2009 04:58 PM

It may not create new tax revenue, but it'll probably transfer tax revenue from within the District to a few miles over in Maryland. As long as it's near a metro stop, it'll work.

Posted by C Dykstra on February 19, 2009 05:49 PM

And by the way, the stadium in Toronto has been successful beyond anyone's imagination. It's making money without needing concerts. Denver is a little tricky as the frugal owner Kroenke also controls the basketball/hockey arena. It has youth soccer fields that are doing well though I haven't heard much news about that stadium's financing either way in a while.

Posted by C Dykstra on February 19, 2009 05:52 PM

C Dykstra,

1. How much "revenue" would it shift? If every game sold out, and every customer spent $50 every game on tickets and food (which seems a bit high), that would be about 1.1 million in tax revenue for a 16 game season. That wouldnt do much to service the debt on the stadium, since doubtless DC United would need to pay bare bones rent and get all stadium revenues to be "competitive". Anything about concerts--given the competition of the new Verizon Center and FedEX, is complete speculation and assuming more than one would be irresponsible.

2. Funny how the stadium owner was willing to build a "free" stadium not long ago, for just the cost of going around public bids for property development in DC. Now that no one wants more shopping malls, I guess he's short of cash.

3. Chris A--your point is what? DC has a soccer stadium that is fairly easy to reach and good enough. The fact that the owners want property deals and other sweeteners--which have nothing to do with soccer--is hardly justification to spend public money on this stuff.

4. The Redskins seem to do all right building their own park--maybe DCU can look into that.

Posted by Gdub on February 21, 2009 10:31 AM

C Dykstra,

1. How much "revenue" would it shift? If every game sold out, and every customer spent $50 every game on tickets and food (which seems a bit high), that would be about 1.1 million in tax revenue for a 16 game season. That wouldnt do much to service the debt on the stadium, since doubtless DC United would need to pay bare bones rent and get all stadium revenues to be "competitive". Anything about concerts--given the competition of the new Verizon Center and FedEX, is complete speculation and assuming more than one would be irresponsible.

2. Funny how the stadium owner was willing to build a "free" stadium not long ago, for just the cost of going around public bids for property development in DC. Now that no one wants more shopping malls, I guess he's short of cash.

3. Chris A--your point is what? DC has a soccer stadium that is fairly easy to reach and good enough. The fact that the owners want property deals and other sweeteners--which have nothing to do with soccer--is hardly justification to spend public money on this stuff.

4. The Redskins seem to do all right building their own park--maybe DCU can look into that.

Posted by Gdub on February 21, 2009 10:32 AM

RFK is good enough? How many more years do you think it'll keep upright? And I wouldn't quite call it a "soccer stadium".

I agree that the funding should be designed to have the stadium pay itself off. Not counting any extra events, DC United will have 3 million+ fan visits a season (15-20k attendance for 15-20 games). That'll be around $50 million in admission revenue each year. ... for a team with a $2 million per year salary cap. They should be able to figure a way to pay off a $180 million dollar stadium that'll last 20+ years.

Why not do it themself? Well the state gets better interest rates when borrowing bonds and otherwise would charge property tax. Those against any public assistance with stadiums can continue to be critical and demand DC United pay it all themself. I'm waiting to see more specifics on what taxes will be in place on the stadium.
http://mlis.state.md.us/2009rs/bills/hb/hb1282f.pdf
A quick read of the bill doesn't seem to fully explain what parts of stadium-generated revenue will go towards paying off the bonds. It's still early in the process of making this stadium deal.

I was at RFK for a Nationals game a couple of years ago, and it didn't seem in any danger of falling down. The place is 50 years old, yes, but my house is 100 years old, and doesn't seem to be crumbling around me just yet. Properly maintained buildings can last pretty much indefinitely.

Posted by Neil on February 21, 2009 10:33 PM

Yikes, put an extra 0 in there and was way off.

What's the track record in TIF projects falling short? Specifically how about Bridgeview or Commerce City?

How long do you think RFK was designed to last? I thought most stadium of that era weren't built to last 100 years. And I don't think RFK is being well maintained. Long-term DC United might as well fold rather than stay there. Maybe Maryland taxpayers would rather they fold than take on this project. We'll see.

TIF oversight, unfortunately, has traditionally been pretty lax - you can read a long, long report on TIFs in Chicago (which predates the Bridgeview stadium) here:

http://www.ncbg.org/tifs/tifs.htm

I know that when they fail, they fail pretty spectacularly. There was a TIF project in D.C. a while back where the only way they managed to salvage it was by expanding the area having its taxes siphoned off to many times the size of the original plan. It all depends on how conservative they are when projecting tax revenues, which we'll know more about when and if they actually present a financial plan.

Posted by Neil on February 22, 2009 08:39 AM

I always sort of think of this in terms of people who visit your house and then complain that they love swimming and you don't have a pool.

No one "requested" that DC United move to the city--the stadium seemed fine when everything was new. Why is the city, or any state, responsible for building a place of business for a soccer team (I like MLS myself and go frequently)? Maryland, of all places certainly isn't responsible. Nor is anyone responsible for getting a good interest rate or lifting property taxes. This league, for the on-field product, isn't even profitable yet!

Fenway Park, with far different construction standards) certainly wasn't built to last 100 years (rebuilt 1930s), and yet its still here. Yankee Stadium with one renovation was certainly in good shape. The reasons these places are built usually has nothing to do with the condition of the stadium, but because the owners want new "revenue streams." Stripping away all the other nonsense about community development, etc--this is what we're left with. And its really their problem.

In a salary capped league, there's no reason that DC United can't last as long as any other team. They draw fans, who spend money, and are loyal. MLS is becoming a bit of a racket and they use well meaning fans to advance their private business agendas. That's too bad for the real sports fans out there.

Posted by GDub on February 22, 2009 08:45 AM

Private business details are hard to fully uncover, but I really believe that some teams are profitable (LA, Dallas, Toronto, and already Seattle) and that DC will never be profitable at RFK. I've followed every reported detail on MLS closely for many years. I agree Maryland holds no responsibility. But they may have an opportunity.

I wish MLS could manage to be profitable in any stadium available but the way the league nearly collapsed in 2002 shows how they couldn't. Now MLS has seemed to figure out how to put teams in new markets (Houston, Salt Lake, Toronto, Seattle) with good results. If a stadium quite far from the city center of Dallas can make a team with a mediocre fan base profitable, I think one a few miles from RFK will work out quite well.

Posted by Dykstra on February 22, 2009 11:15 AM

I wish I could be more sympathetic, as a sports fan. But to be honest, if a sports league needs an 80 million dollar stadium in every city to be "profitable" then maybe it needs a new business model Get some sponsors, rich guys, or whatever. There is no "fair share" of the public purse that soccer fans are entitled too.

If by "opportunity" you mean the chance to assume all financial risk in a stadium venture while guaranteeing a minimum revenue to the team, well a lot of taxpayers are getting tired of these sorts of opportunities. There is enough literature out there to show that the benefits of these stadia are minimal, at best.

Posted by GDub on February 24, 2009 04:33 PM

"There is enough literature out there to show that the benefits of these stadia are minimal, at best." Gdub

I believe you are being shortsighted in regards to this. While I might agree with you in a solid economy, I would say that several hundred construction jobs over the course of two years has huge benefits to any community during a recession much less a depression. How many lunch joints, gas stations, breakfast joints not to mention hardware stores could benefit from this business in a down economy? Could be the difference between a small business going out of business or staying alive. And this does not consider the construction workers themselves and the cash flow they and the work orders will bring to the area. I can't think of anywhere in the US right now that wouldn't like the influx of 180M in their community. It means jobs. It is worth it to the state and people of PG county if it keeps 20 folks off of unemployment. Especially if we have a stadium authority to keep one county from directly footing the bill. Look at the effect this could have immediately. Not just long term.

Posted by JRugs on March 10, 2009 05:27 PM

The issue is bang for your buck: If P.G. County were really spending $100 million to keep 20 folks off unemployment - or even 200 folks - there would be much cheaper ways to accomplish the same thing. Unfortunately, with stadium construction a large chunk of the money goes to things like steel purchases, which doesn't help anybody in Maryland.

Posted by Neil on March 10, 2009 07:12 PM

Thank you for posting the true costs of stadiums. Taxpayers are never the winners. Jack Johnson is firing policemen that we need because he overspent and there's no money left, yet he expects us to come up with $51 million and counting for a stadium. Let the billionaire venture capitalists fund their own stadium, and I'll buy a ticket and come to a game.